Author Topic: Anyone else slowly shifting more to international equities?  (Read 1438 times)

HeadedWest2029

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I've long been US domestic heavy for the equity portion of my portfolio.  And in general, I can get on board with some of the points made by Buffett, Bogle, Jim Collins, etc on why international equities are unnecessary, but I've found myself slowly getting more in-line with the Vanguard Target Date domestic / international AA of late.  Currently, my AA is 60% domestic, 27% international, 13% bonds, cash, other.  I enjoyed Ben's article on global funds and diversification today as well...

http://awealthofcommonsense.com/2018/07/some-considerations-for-investing-globally/ 

Anyone else find themselves slowly shifting to international of late? 

SeattleCPA

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Re: Anyone else slowly shifting more to international equities?
« Reply #1 on: July 05, 2018, 03:05:51 PM »
I've long been US domestic heavy for the equity portion of my portfolio.  And in general, I can get on board with some of the points made by Buffett, Bogle, Jim Collins, etc on why international equities are unnecessary, but I've found myself slowly getting more in-line with the Vanguard Target Date domestic / international AA of late.  Currently, my AA is 60% domestic, 27% international, 13% bonds, cash, other.  I enjoyed Ben's article on global funds and diversification today as well...

http://awealthofcommonsense.com/2018/07/some-considerations-for-investing-globally/ 

Anyone else find themselves slowly shifting to international of late?

I'm not slowly shifting. I've been 25% non-US for years. (David Swensen asset allocation.) So I think you are right to consider this.
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ysette9

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Re: Anyone else slowly shifting more to international equities?
« Reply #2 on: July 05, 2018, 03:51:03 PM »
Our equities are 60% domestic, 40% international per recommendation of a Vanguard person I spoke to. The idea being to mirror the relative weights of the different stock markets around the globe. Personally I jut feel more comfortable with that additional diversification. I am not convinced why keeping such a country-specific weighting is the right thing to do. An added bonus is that all this hand-wringing about US equities possibly being overvalued doesn’t faze me as much since I don’t have all of my equities in that basket.
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PDXTabs

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Re: Anyone else slowly shifting more to international equities?
« Reply #3 on: July 05, 2018, 04:36:26 PM »
I try to keep all my money in VTWSX, which means 53% US / 47% ROW. However, in practical terms I have a little more US because my 401k contributions go into the SP500 and then I rebalance once a year.

CowboyAndIndian

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Re: Anyone else slowly shifting more to international equities?
« Reply #4 on: July 05, 2018, 04:50:03 PM »
Yeah, I believe in international exposure. I have about 22% of my portfolio in international

I have the following in my portfolio
  • Int. Developed Large Cap (VEA) 5.00%
  • Int. Emerging Large Cap (VWO) 7.00%
  • India(EPI) 10.00%

I believe that India is presently like China was about 20 years ago. Also, there is some bias here (see my name).

SuperSecretName

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Re: Anyone else slowly shifting more to international equities?
« Reply #5 on: July 05, 2018, 07:32:55 PM »
Sounds like you are market timing.

There are legitimate reasons for intl funds. Personally Ive been at 40% for years.

But dont just start ramping up now because you saw an article about attractive CAPE or whatever.

Search of bogleheads. Covered as nauseum.

One

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Re: Anyone else slowly shifting more to international equities?
« Reply #6 on: July 05, 2018, 07:44:48 PM »
Nah, I just let it sit in the boring old s&p500. Then when the next great thing comes along I don't have to sell and pay the tax man. Might be good in retirement account but so much easier to keep it simple.

terran

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Re: Anyone else slowly shifting more to international equities?
« Reply #7 on: July 05, 2018, 08:58:44 PM »
I figure the folks with the target date funds have a pretty good handle on these things, so I shoot for around 35% international so I'm between Fidelity's 30% and Vanguard's 40%

hodedofome

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Re: Anyone else slowly shifting more to international equities?
« Reply #8 on: July 06, 2018, 09:07:23 AM »
Most of the international funds are heavily weighted in the countries whos population is stagnant or shrinking. Not a good growth opportunity if you ask me.

The US is still growing because of immigration. Without immigration wed be the same as them.

PDXTabs

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Re: Anyone else slowly shifting more to international equities?
« Reply #9 on: July 06, 2018, 09:51:51 AM »
Most of the international funds are heavily weighted in the countries whos population is stagnant or shrinking. Not a good growth opportunity if you ask me.

The US is still growing because of immigration. Without immigration wed be the same as them.

VTWSX is market cap weighted.

ysette9

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Re: Anyone else slowly shifting more to international equities?
« Reply #10 on: July 06, 2018, 10:26:19 AM »
Most of the international funds are heavily weighted in the countries who’s population is stagnant or shrinking. Not a good growth opportunity if you ask me.

The US is still growing because of immigration. Without immigration we’d be the same as them.
That feels too much like trying to guess what the future market will do for my taste. I don’t take guesses on that stuff because I will be wrong. Who knows? 30-50 years from now it may well be that the African continent is driving global growth as they will be the only people without falling fertility rates. That is why French is predicted to be a world dominant language in the future. I’d be happy to be invested in that. Maybe Japan will do an about-face and open up, nix the oppressive patriarchy, and have a baby and economic renaissance. Perhaps the current administration will do so much damage to our international reputation that immigrants will stop coming and the US, too, will start stagnating. You just have no idea.
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CorpRaider

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Re: Anyone else slowly shifting more to international equities?
« Reply #11 on: July 06, 2018, 12:58:49 PM »
Yup.  It's just math.

Retire-Canada

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Re: Anyone else slowly shifting more to international equities?
« Reply #12 on: July 07, 2018, 07:49:01 AM »
My old AA was CDN 30%/US 50%/International 20%. I decided I wanted to lower my CDN content so I switched to CDN 20% & International 30%. No plans to change that distribution further.

powskier

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Re: Anyone else slowly shifting more to international equities?
« Reply #13 on: July 07, 2018, 11:49:55 PM »
Always been 25% VEA. I like diversification regardless of administration/political events/etc.

chasesfish

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Re: Anyone else slowly shifting more to international equities?
« Reply #14 on: July 08, 2018, 06:29:47 AM »
I'm 14% in international, almost exclusively through two Vanguard indexes.  It is my lowest performing asset group this year.

I can't see a reason to go more than 14% because the total market indexes I also own have plenty of international exposure.
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beltim

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Re: Anyone else slowly shifting more to international equities?
« Reply #15 on: July 08, 2018, 06:52:09 AM »
Most of the international funds are heavily weighted in the countries whos population is stagnant or shrinking. Not a good growth opportunity if you ask me.

The US is still growing because of immigration. Without immigration wed be the same as them.

There's no relationship between GDP growth and stock market returns.  Why do you think there is any relationship between population growth and stock market returns?

Indexer

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Re: Anyone else slowly shifting more to international equities?
« Reply #16 on: July 08, 2018, 08:58:42 AM »
On the stock side my old targets were 60 domestic / 40 international, per Vanguard's recommendation.

To correct a previous post, Vanguard's 60/40 recommendation isn't based on the global breakdown, that would be more 50/50. Vanguard's 60/40 is based on diversification and volatility. International is historically more volatile than domestic, but combining them together results in lower volatility thanks to the extra diversification. Based on Vanguard's research, you get the best diversification benefits in terms of decreased volatility by being slightly heavier on domestic, hence the 60/40.

About a year ago I changed my international sub allocation to 50/50, to match the global breakdown.

Most of the international funds are heavily weighted in the countries whos population is stagnant or shrinking. Not a good growth opportunity if you ask me.

The US is still growing because of immigration. Without immigration wed be the same as them.

If you invest in an international index, like VXUS, most of your money is going to multi-national corporations like Shell, Toyota, Samsung, Nestle, etc. Population growth within their home country isn't a primary driver for such a company. Example: Nestle does significantly more business in the US than in Switzerland. 

Retire-Canada

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Re: Anyone else slowly shifting more to international equities?
« Reply #17 on: July 08, 2018, 09:07:43 AM »
Vanguard's 60/40 is based on diversification and volatility. International is historically more volatile than domestic, but combining them together results in lower volatility thanks to the extra diversification.



The annual results ^^ for funds I hold for the last few years since I switched to index funds. There is just no telling what will be good in any given year and what won't. When I have a 50yr retirement ahead of me I want to have a decent amount of global exposure for diversification.